Inflation rate drops again, now at 5.91 percent (Lead)

New Delhi, Jan 9 (IANS) India’s annual rate of inflation continued its downward trend, falling further to 5.91 percent for the week ended Dec 27, from 6.38 percent the week before, official data released Friday said.The inflation rate was 3.83 percent during the corresponding week the previous year.

The wholesale price index (WPI) for all commodities declined 0.3 percent to 229.5 from 230.2 the previous week. Both figures are provisional.

The index for primary articles declined 0.5 percent to 247.5 from 248.8 the previous week, while that for manufactured products fell 0.3 percent to 200.8 from 201.4.

The index for fuel, power light and lubricants, however, remained unchanged at 330.5.

According to economists, the tight monetary policy and fall in fuel prices in recent months have pushed down the inflation rate over the past few weeks.

Dalip Kumar, the head of projects at the National Council of Applied Economics Research (NCAER), a Delhi-based think tank, said prices will continue to decline steadily.

“Inflation would moderate and close to 2 percent by March 2009,” he said, but cautioned that despite the rate of inflation moderating, India needed policies that can prevent growth from slipping further.

Shriram Khanna, head of the commerce department at the Delhi School of Economics, went a step further, maintaining that the Indian economy would be driven by how developed countries stabilise their financial sectors and the markets.